BUENO vs REYES

G.R. No. L-22587

April 28, 1969

FACTS
On January 7, 1936 Francisco H. Reyes filed an answer in Cadastral Case No.
47 of Ilocos Norte, claiming lot No. 2857 of the Laoag Cadastre as property
belonging to himself and to his two brothers, Juan and Mateo. The case was
heard without opposition, and the lot was adjudicated in favor of the
claimants on March 27, 1939, in whose names Original Certificate of Title No.
19074 was issued on the following July 7.Twenty-three years thereafter, or on
December 12, 1962 to be exact, the plaintiffs filed the action below for
reconveyance of lot No. 2357. They allege in their complaint that the said lot
originally belonged to Jorge Bueno, who died leaving three children, namely,
Brigida Bueno, Eugenia Bueno and Rufino Bueno, to whom the property
descended by intestate succession; that subsequently Brigida and Eugenia
died, leaving their respective children, who are now the plaintiffs-appellants
together with Rufino Bueno; that Francisco H. Reyes was Eugenias husband
and the father of the plaintiffs surnamed Reyes, who agreement among the
heirs of Jorge Bueno was entrusted in filing the answer in the cadastral
proceedings and in obtaining the title thereto for and in behalf of all the heirs
of Jorge Bueno, including his wife Eugenia Bueno.
ISSUE
Whether by mistake or fraud, the real owner being another person,
impresses upon the title so acquired the character of a constructive trust for
the real owner, which would justify an action for reconveyance.
HELD
Under Article 1456 of the Civil Code, if property is acquired through mistake
or fraud, the person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property comes.
An action upon a trust is imprescriptible, without distinguishing between

express and implied trusts, the better rule, as laid down by this Court in
other decisions, is that prescription does supervene where the trust is merely
an implied one. The constructive trust arose by reason of the bad faith or
mistake of the deceased Francisco H. Reyes, compounded by the
connivance of the appellees Juan and Mateo Reyes.

FABIAN vs. FABIAN

G.R. No. L-20449 (1968)

FACTS
Pablo Fabian bought from the Philippine Government lot 164 of the Friar
Lands Estate in Muntinlupa, Rizal, of an area 1 hectare, 42 acres and 80
centares, for the sum of P112 payable in installments. By virtue of this
purchase, he was issued sale certificate 547. He died on August 2, 1928,
survived by four children, namely, Esperanza, Benita I, Benita II, 1 and
Silbina. Fabian, married to Feliciano Landrito, and to Teodora Fabian, married
to Francisco del Monte, for the sum of P120. The vendees spouses forthwith
in 1929 took physical possession thereof, cultivated it, and appropriated the
produce therefrom (and concededly have up to the present been
appropriating the fruits from the land exclusively for themselves). On the
basis of a partial stipulation of facts together with annexes, the lower court
rendered judgment on June 28, 1962, declaring that the defendants spouses
had acquired a valid and complete title to the property by acquisitive
prescription, and accordingly dismissed the complaint, with costs against the
plaintiffs.
ISSUE
Whether or not may laches constitute a bar to an action to enforce a
constructive trust?
HELD
Upon the undisputed facts in the case at bar, not only had laches set in when
the appellants instituted their action for, reconveyance in 1960, but as well
their right to enforce the constructive trust had already prescribed. When
respondents executed the aforementioned deed of extra-judicial settlement

stating therein that they are the sole heirs of the late Marcelo de Guzman,
and secured new transfer certificates of title in their own name, they thereby
excluded the petitioners from the estate of the deceased, and consequently,
set up a title adverse to them. And this is why petitioners have brought this
action for the annulment of said deed upon the ground that the same is
tainted with fraud. Article 1456 of the new Civil Code, while not retroactive in
character, merely expresses a rule already recognized by our courts prior to
the Codes promulgation. The express trusts disable the trustee from
acquiring for his own benefit the property committed to his management or
custody, at least while he does not openly repudiate the trust, and makes
such repudiation known to the beneficiary or cestui que trust.